Time for private sector to think big & bold for investment cycle: DFS secy

Banks need to do stress testing for cyber risks

After the government chipping in huge amounts for infrastructure development, the private sector should now think big and bold to start a new cycle of investment in the country, Department of Financial Services (DFS) Secretary Vivek Joshi said on Wednesday.

“The scale and success of this cycle will largely depend on the people who are present in this hall (industrialists). The need of the hour is to think big and bold by ensuring that execution remains timely and robust. It is not easy, but can be done and India is seeing this more frequently now,” Joshi said in his keynote address at the State Bank of India’s Banking and Economic Conclave here.

“For this to happen, we have to ensure that all of us pull in one direction and that has been the intention of requesting all of you to come together in this manner,” Joshi said, adding that the three key players in capital expenditure and investment were entrepreneurs, bankers, and the government as the facilitator. They together can make a joint approach feasible and practical, he said.

Referring to support to industry, the DFS secretary said banks and financial institutions might need to reassess whether their role should also include hand-holding support for project conceptualisation and structuring.

There is yet another facet to all of this while financing of projects and capital expenditure is vital. It is equally important that small ticket loans for employment generation grow even faster. Furthering financial inclusion and unlocking the potential of citizens is a national priority and a moral imperative, Joshi said.

Referring to growth in digital networks and cyber risks, he said financial institutions, particularly banks, should include stress testing of cyber risk as part of their risk assessment. This is necessary to gauge the impact in case any cyberattack happens on their systems, Joshi said.

Banks in Europe and Singapore have initiated such a step and banks in India also need to take appropriate steps. Customer confidence in the digital system is paramount and any unfortunate incident may shake their belief from the digital payment ecosystem. Therefore, all the banks and fintechs need to ensure a robust system and tools are in place, he said.